Posted in Personal Injury on May 12, 2023
Auto insurance coverage can be confusing, but they are essential to protect yourself and your family in case of an accident. There are several types of auto insurance coverage, and each one serves a specific purpose. In this blog post, we will explain the various auto insurance coverage and which ones a consumer needs to protect themselves and their family.
Liability coverage is the most basic type of auto insurance coverage. It covers damages that you may cause to other people’s property or injuries that you may cause to other people in an accident. In most states, liability coverage is required by law. Frequently, however, the “minimum limits” can be as low as $25,000- not near enough to compensate someone in a crash involving even modest injuries. When determining how much liability coverage to buy, consider your personal assets and make sure you buy enough coverage so that if you seriously injured someone else, the coverage would make sure that the injured party doesn’t pursue your personal assets beyond insurance. It is also important to note that liability coverage does not cover damages to your own vehicle or injuries you may sustain in an accident.
Collision coverage is an optional type of auto insurance coverage that covers damages to your own vehicle in case of an accident. It covers the cost of repairs or replacement of your vehicle, regardless of who is at fault. Collision coverage is recommended if you have a new or expensive car.
Comprehensive coverage is another optional type of auto insurance coverage that covers damages to your vehicle that are not caused by a collision. This includes theft, vandalism, fire, and natural disasters. Comprehensive coverage is also recommended if you have a new or expensive car.
Med Pay or Personal Injury Protection (PIP)
Med Pay or Personal injury protection (PIP) is a type of auto insurance coverage that covers medical expenses and lost wages for you and your passengers in case of an accident. Med Pay/PIP is required in some states, but it is optional in others. Med Pay/PIP is especially important if you do not have health insurance or disability insurance.
Uninsured/Underinsured Motorist Coverage
Uninsured/underinsured motorist coverage are two separate types of auto insurance coverage that covers damages and injuries that you or your loved ones may sustain in an accident caused by a driver who either does not have insurance (uninsured coverage) or does not have enough insurance to cover the damages (underinsured coverage). Uninsured/underinsured motorist coverage is optional, but it is highly recommended. Some insurers will try to sell you one without the other. Don’t do that! Buy both underinsured and uninsured coverage with the highest limits you can afford. This is the coverage that protects you and your loved ones if you are injured from someone else’s negligent driving.
Gap insurance is a type of auto insurance coverage that covers the difference between the actual cash value of your vehicle and the amount you still owe on your loan or lease. Gap insurance is recommended if you have a new or expensive car and you owe more on your loan or lease than the actual cash value of your vehicle. Be careful to shop around for Gap insurance as often the product sold at the dealership has a high markup.
In conclusion, there are several types of auto insurance coverage that a consumer needs to protect themselves and their family. Liability coverage is required by law in most states, but collision coverage, comprehensive coverage, personal injury protection, uninsured/underinsured motorist coverage, and gap insurance are optional. It is important to evaluate your needs and budget when choosing auto insurance coverage.
Injured in an accident? Let the personal injury specialists at Heenan & Cook handle dealing with the insurance company, and maximizing the value of your injury claim.